Good Morning! From Allendale, Inc. with the early morning commentary for August 10, 2018.

Grain markets are on edge ahead of the USDA report this morning at 11:00 AM. The biggest question swirling the market is what USDA will do with yields.

How accurate are USDA's August yield estimates? Rich Nelson did a quick study to find out. Take a look at hisfindings here.

Reuters poll of average analyst estimates for today's USDA Supply and Demand report has 2018/19 corn production at 14.411 billion bushels on a yield of 176.2 bushels per acre. Ending stocks are estimated at 1.636 bb.

Soybean production could be 4.407 billion bushels on a yield of 49.6 bpa according to the average guess. That would push ending stocks to .638 bb. Wheat ending stocks are estimated at .961 bb. The report will be out at 11:00 AM CDT today, and as we've mentioned will also mark the first time that the press will not have a "lock-up" view of the report ahead of its release.

Weekly export sales for the period from July 27th to August 2nd reported corn sales of 1,212,162 metric tonnes which was within the 700,000 1,500,000 trade estimate. The old crop portion of the sale was the largest for this week in 12 years. Soybean sales were reported at 954,381 metric tonnes, also within the trade estimate. Wheat export sales came to 317,066 metric tonnes, within the 200,000 500,000 trade guess, but the second lowest in history for this week in history. 28% of USDA Supply/Demand expectation has now been met. On average, we should be at 44%.

Conab estimates Brazil's 2017/18 total grain crop at 228.56 million tonnes, a slight increase from July's 228.51. Of that, the total corn crop is estimated at 82.18 million tonnes, a drop from July's 82.92. The soybean crop was reported 118.98 million tonnes, just above last month's 118.88.

Strategie Grains anticipates that the EU will use less wheat for livestock feed and rely more on maize due to poor weather throughout the region. They reduced their most recent wheat for livestock feed estimate by 3.1 million tonnes from last month, and also noted that wheat exports would fall by 1.2 MT from their previous estimate.

Outside markets will have their eye on this morning's CPI and Core CPI reports at 7:30 AM CDT. The Treasury Budget at 1:00 will also get some attention.

Mexico is "encouraged" to keep working with the United States to update the North American Free Trade Agreement (NAFTA), Mexico's Economy Minister Ildefonso Guajardo said after a two-hour meeting with U.S. Trade Representative Robert Lighthizer on Wednesday. (Reuters) He further stated that they plan to finish bilateral talks with the US before rejoining with Canada.

Weekly beef export sales came to 14,560 metric tonnes. The past four weeks have been a little disappointing at 10% under last year. Pork sales were big again this week at 24,871 metric tonnes. That was 32% over last year and marks four weeks in a row of good sales (50% over last year for those weeks). After these past few weeks, sales are up 5% over last year.

Lean hog price limits will be expanded to 4.50 for today's trade after yesterday's limit up trade.

Dressed beef values were mixed with choice up .33 and select down .77. The CME Feeder Index is 150.45. Pork cutout value is up . 48.

GRAIN BIDS ARE SUBJECT TO VERIFICATION WITH THE GRAIN DEPARTMENT. Cash bids are 10 minute delayed. Due to the volatility in the grain futures, we will be buying grains only from 8:30am through 1:00pm of each business day.